Homebrews are those extra applications and unofficial games(emulators included) that are written and coded by psp programmers. ISOs/CSOs/backup games and PS1 games should not be considered homebrew IMO. Theyre just called backup games and Pops =)

No theres currently no third party software for you to do that unfortunately. I think its because of the PSPs inability to auto rescale the movie resolution. For myself, I encode them to .pmp format and play it with pmp player. Its usually smaller file size and higher res =) Also, its not so public like when you want to show your friends, the psp and you don't want to let them know what "movies" you have inside.